StopBuyingCrap.com

One of my hidden fetishes is to test-drive various financial services that can be found on the web. From financial management tools to low cost brokerages, you name it, I’ve probably heard of it or have tried it.

Having said that, my personal information is most likely riddled across the Internet by now, being just a few missteps away from identity theft hell. Thankfully I’m penniless, so the most they can steal from me is my sexy name, job prospect at the Department of Defense, and future livelihood.

I first learn about Zecco.com when they first launched back in 2006. Figuring they have had a year or more to mature their service, I signed up for a Zecco brokerage account about half a year ago. Or at least I thought I did.

Essentially, I filled out all my information, submit my account application and then… nothing happened. An email told me that I should get a follow-up email when my account is approved and open, but it never came.

Figuring they’re sorting things out on their end, I quickly forgot about my application, as the last thing on my mind was yet another online account I’d have to deal with.

So months later, I started to receive marketing and service related emails from Zecco, notifying me of new features, changes to policy, etc. I guess my account was opened after all.

Just as I was about to lose interest in using the account, I received an email telling me that if I deposit and fund my account with $2,500, I would receive a $100 bonus. Never one to turn away free money (cheap ass alert), I quickly shoot off an email to customer service to inquire about my account status and trading key. Within a business day, I received a reply and was off to setting up my Zecco trading account.

Zecco Trading Brokerage Account

• 10 free stock trade each month for account balance of $2,500 or more.
• $4.50 each for additional trade per month, and for accounts with less than $2,500.
• No inactivity fee, no account minimum.
• No-load mutual fund at $10 per trade (online).
• Free ACH. Additional fees information can be found here.

The interesting thing about Zecco is that it’s two entity being served on one website. There’s the Zecco.com web portal, which handles the blogs, community forums, and social aspect; and then there’s Zecco Trading, the low-cost brokerage firm based in Ontario, CA that handles the brokerage accounts (back-end served by Penson Financial Services).

You’ll find this to be most evident in the community forum, where members often ask question related to Zecco Trading services, rates, and policies. The poor moderators often can’t answer user questions due to understandable regulatory and legal issues — quite a customer service mess when you try to mend an active online community with regulated financial services.

To be clear, this review will focus on the Zecco Trading brokerage account, not the social investing community aspect of Zecco.com.

Interface, Trading, and Depositing

Although not the prettiest or easiest of interfaces, Zecco Trading has improved a bit since launch. In fact, during the course of my account usage, they’ve revamped the ACH page to make depositing and transferring of funds much easier and more intuitive. Initial setup of a link account was a bit hard to figure out, but should be much easier and straightforward now with the interface ramp-up. Transfer was fast and cleared within 1-2 business day (although I believe initial deposit takes 5-10 business days to clear).

Not being an active trader, I can’t provide too many insight on the trade and quote system. Zecco claims the industry standard of 30 second for order handling, and my limit orders were executed fast within seconds of reaching their limit. There’s no Level II quotes of course, and no streaming quotes, so to get the latest real-time quote you’ll need to re-click the quote button. Modifying an order also seems to take awhile, so you’re probably better off canceling the old order and inputting in a new order. If any of this matters to you, then Zecco is probably not right for you (at least, as a primary trade account anyway).

Each trade executed will result in a paper statement being mailed, detailing the transaction. A fairly standard practice, but it appears there’s no option to turn the paper trail off or have users sign for electronic delivery of notifications and statements (an easy way to reduce cost for them so it should be a no-brainer, most likely something they’ll implement eventually). [Update on this below].

I made a few trades to give the service a test, and it was definitely refreshing to buy stocks without having to price in the commission charges (SEC fees are still there, of course). My last trade was an incredibly exciting one, a semi-short term treasury bond ETF (iShare SHY), to balance out my other ridiculously allocated portfolios.

This last trade highlights one good reason to have a Zecco Trading account: with trade commission out of the way, buying a lump amount of low expense ratio index or bond ETFs can be quite attractive — especially for retirement accounts such as IRAs.

Customer Service and Information Finding

One of the things that I hate the most is having to dig through a website just to find standard information. Things such as money market sweep account rate and their accompanied prospectus should not be difficult to find. It seems that Zecco would rather constantly point you to contact their customer service via email or phone, instead of having all the information in an easy to find location in the first place.

Having said that, all my instances of emailing customer service were without issues. I first emailed customer service about how I can setup my trading key, and was greeted with a prompt clear reply on how to get setup. Other emails about rates, minimums, forms were also replied with a timely and informative matter. This isn’t the case for other people on the web, so I was either lucky or others were unlucky.

Random Margin Calls and Outages

Talk about a deal killer. Before I even started actively making trades on my Zecco account, I received an email from Zecco Trading’s margin department, issuing me a maintenances margin call. For those that don’t know, a maintenance margin call generally occurs when your margin account value has dropped to such a value that your equity percentage fell below the minimum maintenance requirement. Basically, you borrowed money to buy stocks and your stocks dropped too much in value, now the broker is asking you to fund more money into your account or your assets will be liquidated and you’ll be sh*t out of luck.

Now, because of the generic name of the “From” line, I immediately thought that one of my brokerage account was compromised and someone went on a stock buying spree, as most of my accounts only had $15.36 available in cash (enough for four meals at In-n-Out).

Well, Cap, good old buddy, I thought to myself. This is what you get for having trillions of accounts — you’re bound to get screwed over one of these days.

Upon further reading of the email, I realized that the email was from Zecco, my recently funded account that I haven’t even executed a trade in yet. Thinking it to be an error, I logged into my Zecco Trading account to double check, and sure enough my account was still at its normal value.

Minutes later, I received another email from customer service, notifying me that they’d like to “recall” the margin call message. I guess it’s their way of saying, “Sorry, looks like we sent an alarming email to the wrong person. Our bad!”

A quick Google search reveals that I wasn’t the only one to receive such an email (and not just on that particular day). An instance of a customer service rep “fat finger” frequently hitting the wrong button? Whatever the case, projecting the image that you may not know how much we have in our account is never a comforting factor.

Besides the random margin call email, I also experienced a random website outage during weekday trading hours. Just a few weeks ago, Zecco’s site was down from unknown reasons. Upon visiting the site, I was greeted with a message that a “scheduled upgrade” was in progress. A scheduled upgrade on a Monday morning at 11 AM EST? Right…

The outage of course didn’t affect me as I don’t actively trade, but the downtime wasn’t acceptable either for an online-based brokerage.

Free Trade is Attractive but Service Quality is Questionable

It’s hard to recommend a Zecco Trading account to anyone, given my experience, but the fact of the matter is, the free trades are for real and do work. I can see a two types of users having this account:

• Someone that knows exactly what they’re getting into, and will utilize the 10 free trades to supplement their other online brokerages.
• A light long-term investor who needs the occasional trade and will never need more than the 10 free trades per month.

If I didn’t receive the mistaken margin call, and if the interfaces were more user friendly, I can easily recommend a Zecco Trading account as a potential IRA choice. For a retirement account, being able to make commission free trades makes many low-cost ETF much more attractive, especially if you can’t make large lump sum purchases. You can potentially have a very diversified portfolio for very little initial funding!

Zecco has had awhile to polish up their service since launch, but it seems that they’re expanding faster than they can service their current customers properly. Their initial offering of 40 free trades per month with no minimum balance required was indeed very attractive, but the change to only 10 trades per month with a minimum balance seems to have jaded quite a few people.

The website has been revamped quite a few times, they are offering more tools for their users, and it appears customer service is getting better and better. They have raised much more capital in recent months, so they certainly have the assets to improve their service and product, provided they hire the right people to execute. Still, I’ve been seeing their advertisement much more frequently on top-tier news/finances websites recently, so whether or not they’re spending their fund at the right places, and whether or not the business model is sustainable is something that remains to be seen.

Pros:

• Sure it’s not 40 free trade anymore, but 10 free trade is still 10 free trade.
• Fast customer service email reply (for me anyway).
• A nice community forum with smart members and moderators.
• Free trade / low commission makes various ETFs an attractive offer.

Cons:

• Seemingly unreliable and unpolished
• Numerous customer service complaint on web
• Difficult to find proper information on website
• May change amount of free trade per month again or require higher account balance.

Related Links and Resources:

• Zecco Trading’s Better Business Bureau Profile and Rating
• Zecco Free Trade Review Part 1 & Part 2 - My Money Blog
• Zecco: A Little Less Free - Business Week

Update on Paper Statements:

Funny thing. After I finished writing this review, I found out through browsing my blog feed that Zecco has now “allowed” their users the option of electronic statement and trade notification. It’s not too much of a choice though, as Zecco will start charging users $1.50 per trade confirmation and $2 per paper statement after May 30th.

I’m assuming they sent out the new changes and extra fees notice via email, but for whatever reason I didn’t get the notice. Still not sure why they didn’t limit cost and headache in the first place by having electronic delivery as an available default option.

In fact, it was just a few hours ago at around 10 PM PST.

The repo man was a nice big guy, with tats all over. He was looking for someone with a similar last name. Poor Cap Two supposedly didn’t pay his bill for his Toyota Corolla, so the bank was forced to hire a repossession agent to get the car back.

He didn’t give us much of a fuss, since he was just tracking down possible locations of Cap Two (had a list of address with him). He apologized for the inconvenience and went on his way.

That was my first interaction with a repo man, and from what I’ve heard and read, this was probably one of the nicer ones out there (not that it’s an easy job, repossessing properties and all).

A friend of a friend had his car almost towed during the middle of the night by the repo men. After a heated argument, they finally figured out that they were at the wrong house — the same exact car can be found two houses down the block.

A quick Google search also reveals interesting stories of repo man knocking at odd hours, or not even bothering with the knock. One such story from the perspective of a repo man recounts how often he’ll find repo’ed vehicles straddled with contrabands.

Thankfully, even during my debt-ridden days, I never came close to having any repossession problems. So hopefully this will be my last and only encounter with a repo man. I understand the bank’s position and how difficulty the job of repossession can be for an agent, but I can’t imagine how it must feel for the person being repossessed — to have your car, house, or possession taken away, regardless if you’ve signed away your rights.

It’s probably too late for Cap Two to save his Corolla, as repossession is generally the last course of action a lender will want to take; but I sincerely hope that Cap Two will be able to get out of his financial hole eventually…

I make money from my blog (yes, really). But to be honest, I’d always feel a bit sheepish about it — as if I’m cheating the balance of the universe by making money from writing about non-sense. I certainly don’t make enough to quit my day job (if I had one), but earnings did peak enough to warrant making filings to the lovely IRS.

Revenue from this blog is generated by a few different sources: Google ads that you’ll see on single pages; a handful of affiliate links that earns me a buck or two; the standard text links; and surprisingly, sign-ups from survey websites (something I completely forgot about).

There was a blog post awhile back that details how you can earn money online by taking online surveys. In essence, you sign-up, fill out your consumer attributes, and the companies occasionally sends you matching survey via email. The pay varies and depends on the difficulty and time involvement in the survey.

Last week, I logged into my SurveySavvy account and was surprised to find that I have accumulated over a thousand dollars in survey incentives. That’s a lot of Cheetos.

This is thanks to sign-ups from regular readers like you.

Seeing as how I didn’t do anything special for the blog’s three year anniversary, how about we give away a $5 Amazon gift certificate to 20 random readers? This will be sure to alleviate my money making guilt and/or celebrate three years of awful blogging.

Amazon Gift Card Give Away Details

• Click here and leave a comment along with an email address of your choice.
• One entry per person, you cheap bastards.
• 20 random commenter will receive a $5 Amazon gift card via email.
• Drawing ends in a week on May 8th, 2008 at 12:00 PM PST.

Long time readers that have forgotten to unsubscribe would know that I have a certain unhealthy fetish for Cap’n Crunch cereal — enough so that I’d find numerous attempt to work the cereal into various post on a “personal finance” blog (and even taken screencaps of said cereal when it appears on TV).

Although I love to crunch away in the morning, afternoon, and evening… my love and loyalty for Cap’n Crunch came into an abrupt halt back in 2005, when I switched brand (gasp) and tried another cheaper alternative.

Was I crazy that fateful night in Wal-Mart? Did my years of loyalty vanish due to competitive pricing? Yes to the first and double-oh-yes to the second.

My post detailing the switch can be a bit exaggerating (and lame); but at the end, I bought Cap’n Crunch for years because I thought it was the only choice available — a pretty silly mindset for an easily reproduced preprocessed food such as cereal — but that’s the power of marketing, and the power of a brand.

Being a savvy consumer is about going beyond such mindsets, to be able to distinguish between hype and value, and be able to get the most out of your purchasing dollars. Here are some things a consumer should always keep in mind:

1. Everyone will always have a favorite brand.
   Apple products lover. Starbucks addicts. Crunch Berries enthusiasts. Name the company or brand, and you’ll have a following. There is nothing wrong with having a preferred brand for certain products, but if you always limit your choices to the tried-and-true, you may be doing yourself a disservice to discovering, cheaper, or even better alternatives.
2. Not all brands are created equal.
   The big names do well because they deliver great products at consistent quality. You generally know what to expect when you buy a Honda and the shipping time is fairly consistent when you order a book from Amazon. That’s the problem with trying something different, you might end up with a crappy result. But with the help of the Internet and a little comparative shopping, a savvy consumer can always find actual differences between choices. And it’s not always about the cheaper but just-as-good choices too, sometimes, you’ll simply find better stuff for higher prices.
3. Understand the marketing and identity shaped behind a brand.
   Marketers poke brains to find image and terms you can relate to. Apple iPod commercials are hip and cool. AARP TV spots are slow and soft spoken. If you’ve ever seen the other side of the fence, you’ll see that the companies may label you as “easy going,” “price conscious,” “value oriented,” “image conscious,” “early adopter,” and “trend follower.” You may think you want or need a certain widget and you may think you have the best widget for your needs, but understand that there are other forces at work, constantly influencing your purchasing decisions. Being able to see through the layers and truly differentiate products is the hallmark of a savvy consumer. And of course, the Internet made all of this much easier. Search “### review” or “### sucks” to get opinions that can help you narrow your choices.
4. Challenge these identity and make them earn and keep your loyalty.
   Dell may have treated you right for years. Fidelity may have never screwed you over. If you deal with a company for years because you trust them, make them constantly earn and keep your business — especially if they screw up. This isn’t about being a hard-ass customer, it’s about reminding the companies that there are always other alternatives out there. Any businesses worth their salt knows this, and any company that’s respectable would want to take that extra small step to help win you over or keep your business. In a world where different choices are clicks away, there is nothing wrong with expecting companies to fight over each other for your business.

There is nothing wrong with having a preferred brand for certain products. It’s okay to trust a big brand over some unknown generic, but you should always challenge these notions and thoughts.

No one sane needs to research intensively over a breakfast cereal, but just because your car has treated you right for years doesn’t mean there aren’t better rides out there. Just because your financial institution fits your current need doesn’t mean there aren’t more personalized banking solutions out there.

At the end, we’re the driving force behind the share prices, the earning reports, and the executive compensations. Never stop challenging them to earn and keep your loyalty.

Related Post:

• Brand Conscious Buying #3 - Gasoline
• Brand Conscious Buying #2 - Toilet Papers
• Brand Conscious Buying #1 - Cap’n Crunch

After about eight months of paying an additional $20 to T-Mobile for my Blackberry data service, I have decided to remove the plan in an attempt to cut various unneeded expenses.

Paying more than $65 per month for a mobile phone plan was just ridiculous, considering how little friends I have to talk to. As my sister often said to me when I misplace my phone: “Why do you even need to look for it? Everyone that’ll call you is already here with you.”

This decision was made much easier as I had already temporarily removed the data plan during my month abroad earlier this year. By cutting my “Crackberry” addiction of checking emails (I needed my fix of daily joke emails and Viagra spam)… I have found extra time to update my blog, evident by the one post I made in January, the six I wrote in February… etc.

Removing the data service was simple enough, thanks to the rampant days of account services manageable via the web. Easily removing options like these always made me wonder how the company stay in business if they provide a crappy service, but I suppose easily adding on crap can also be a selling point. (On a side note, My T-Mobile needs some seriously fixing. The site is down or non-functional half the time).

One important thing I realized from this episode was that had I not gone without the service while abroad, I would have never noticed the presences of the extra monthly charges. Was it nice to have the Internet at my fingertips, even though it brings me back to the dial-up days? Sure.  But this was one of those “nice to have but not needed” service — something I’ve kept just because it’s there and it was convenient to have.

If I can live without it for a month, I can live without it for years. Until I’ve reached the point where I need constant Internet access (seriously hoping never), I’ll be keeping the data service off my mobile phone plan.

Some Questions to Ask Yourself When Cutting Monthly Expenses:

• Why did I got this in the first place?
• Can I go a month without using it?
• How many times per month do I use it?
• Is there a cheaper (or free) alternative?
• Is this a “nice to have” or a “much needed” service?

So the pay day has finally come. I can finally cash out and say what I’ve always wanted to say to colleagues, family, and friends — because I’m stinking rich. It is strange that lucky events often happens to me on April First of every year - but who am I to deny destiny?

What to do first? Perhaps buy myself another private jet? Or another 3 series from BMW? But why stop at the poor man’s M3?

With odds of 1 in 175,711,536 for the Mega Millions, many of us would expect that many Americans would know better to avoid sinking money into lottery tickets — but unfortunately according to a survey from the Consumer Federation of America, 21% of Americans still believe lottery to be a practical means of wealth accumulation.

You can argue that when the jackpot reaches a certain astronomical value, the positive expected value would warrant a lottery ticket purchase. And we can throw other factors such as after-tax results, taking the lump sum, more than one person winning into the equation, and have some math debate about probability theory — but in general, it is still safe to say that most lottery tickets are a crappy bet.

Anyhow, who cares? I’m stinking rich.

Sure, it’s a bit strange that I’ve won a lottery that I haven’t entered myself into, but hey, a “National Lottery” from the city of Istanbul can’t be wrong!

Related Post & Articles:

• Woops, I Bought a Priavte Jet
• Woops, I Bought a BMW 325i
  
• Stop Buying Crap #15 - Lottery Tickets
• Why poor people win the lottery - from MSN Money

There are three things I can do with my tax rebate check:

1. Spend it.
2. Save it.
3. Invest it.

America’s retailer and the U.S. government wants me to spend it. My parents would probably want me to save it. My future children who’d no doubt be spoil brats like me, will want me to invest it. Being the conformist that I am, I will follow my readers’ advice and buy myself a Wii.

CNN’s current unscientific poll shows that 48% of respondents will pay off their debt, 32% will save it, and only about 20% will immediately stimulate the economy by spending it.

With retailers pulling out all the tricks to get you to spend, including allowing you to cash your tax rebate check at their location, a quick reminder on the sensible things to do shouldn’t hurt.

Three Sensible Ways to Utilize Your Tax Rebate Check:

1. If you have outstanding credit card debt, the sound thing to do will be to pay off whatever amount you can with your tax rebate check.
2. If you haven’t set up an emergency fund yet, now would be an incredibly good time to do so.
3. If you don’t have large interest debt and you have the emergency fund covered, the next logical step would be making the money work for you. Invest the $300, $600, $1,200, or whatever amount Uncle Sam will give you. Throw it into your IRA, give a boost to your target retirement fund; heck, if you really want to be crazy, put it towards your children’s college fund.

P.S. Be alert for advance payment scams and other rebate scams. Avoid the hassles and troubles, deal with the IRS only and you should have little issues.

Related Resources:

• Basic Information on the Stimulus Payments - from the lovely IRS
• Stimulus Rebate Payment Schedule - from Blueprint for Financial Prosperity